Celebrating IWD: on the need for equal pay

Firms with diverse leadership are 21% more likely to outperform from a profitability perspective, according to findings in McKinsey & Company’s Diversity Series. In the second article in SCI’s series celebrating International Women’s Day, Stephanie Mah, svp, structured finance research at DBRS Morningstar, argues that pay equity is paramount in retaining female representation in the securitisation industry.

“In diversity there is beauty and there is strength,” said activist and poet, Maya Angelou. Beauty and strength, although uncommon adjectives to describe some industries, still apply to the business world.

What firm doesn’t want to enhance employee engagement and culture? Spur innovation? Improve its bottom line? While we have made strides in recent years, the structured finance industry needs to build on its proactive efforts to represent a more diverse workforce. It starts at the bottom.

We need to attract bright young women to the securitisation field and then cultivate them to be future leaders in our industry. The jumpStart Program, launched in 2021 by 100 Women in Finance, aims to take that first step. The virtual event brings together female college students and introduces them to the world of finance, with access to accomplished women in the field.

Similarly, the Structured Finance Association’s Women in Securitization (WiS) group has organised initiatives to introduce female college students to the world of securitisation and give them continued access to women leaders in our industry. WiS, which was established in 2014, goes beyond that first step and aims to foster professional development, retention and advancement of women in structured finance throughout all phases of their careers. It is critical for young women entering our field to see female leadership at the executive level - serving not only as role models, but also as tangible proof that there’s a potential seat for them down the road.

Only a few years out of college, I worked for The Public Securities Association (later known as The Bond Market Association), an international trade group for the bond market industry, where I had the privilege of working alongside Heather Ruth, the association’s president. She led the Association when all its committees, apart from one, were headed by male sell-side executives. It was inspiring to see her lead.

I have been very fortunate to work alongside other female executives and role models, including my previous stint reporting to Vickie Tillman, retired president of Morningstar Credit Ratings, and my current post under Claire Mezzanotte, head of global structured finance, at DBRS Morningstar.

I have been able to sharpen my own skills by observing their work and witnessing first-hand how they tackled difficult projects. The guidance and support of these three amazing women have profoundly influenced the trajectory of my career.

Mentorship and sponsorship are important throughout all levels in one’s professional career, including mine. Diversity matters, not only in increasing female representation within our industry but also in expanding opportunities for women from various cultures and ethnicities - including, among others, Asian Pacific women, Black women, Latina women and Native American women. Racial and gender diversity - especially across a multitude of cultures - ushers in different and more comprehensive skills, viewpoints and strengths.

To put it in terms that our industry is more akin to following, diversity can boost the bottom line. According to findings in McKinsey & Company’s Diversity Series, gender diversity success led to a 25% increased likelihood of outperformance, and firms with diverse leadership are 21% more likely to outperform from a profitability perspective. As investors and regulators alike place increasing importance on environmental, social and governance concerns, the momentum of diversity, equity and inclusion efforts across all industries will likely continue.

Recently put into effect, California’s regulation AB 979 requires a minimum of one minority director on corporate boards. The legislative mandate expands at the end of 2022, with the requirement of having a minimum of two to three minority directors at larger corporate boards. Moreover, the SEC is considering board diversity and disclosure rules, which would be in line with the United Nation’s Sustainable Development Goals for organisations to work toward empowering women and girls.

Challenges ahead are in the form of taking the next steps beyond diversity efforts, towards equality and inclusion. Pay equity is paramount in retaining female representation in our industry.

Equal pay and salary transparency efforts will help shed some light on budgeted salary bands and empower women to better know their worth. In addition, inclusion must also be an integral part of the equation.

Simply having increased representation of women in the securitisation industry is not enough, especially when representation stays at the junior level; accomplished and effective women need viable opportunities for advancement to senior management and executive levels, with heightened awareness, connections, empathy and mutual respect. Challenges may lie ahead, but so do beauty and strength.